Royal Bank of Canada has signed a share-swap deal worth well over $1 billion to buy Vancouver money manager Phillips Hager & North Investment Management.

The deal still needs regulatory approval. If it goes through as planned, the current and retired employees who own the firm will receive a total of 27 million RBC shares.

At Thursday's closing price of $50.39, the shares would be about $1.36 billion.

Part of that payout would be delayed for three years after the sale closed. Even so, it would represent a huge payday, undoubtedly making multimillionaires of many employees.

PH&N, founded in 1964, has a staff of about 300 and offices in Vancouver, Victoria, Calgary, Toronto and Montreal.

According to the Investments Funds Institute of Canada, it has mutual fund assets of $19.5 billion under management, making it the 11th-largest fund company in Canada.

With a total of $69 billion under management, the firm also runs investments for pension funds and wealthy individuals, among other clients. More than $13 billion is managed for private clients and their families, it says on its website.

To the general public, the most familiar figure at PH&N is chief economist Patricia Croft, a frequent commentator on television.

But the one with the top job, president John Montalbano, stands to get an even bigger one.

Blending 2 businesses to make a giant

He would become CEO of a combined unit comprising PH&N and RBC's asset management business, with assets of more than $160 billion under management in Canada, the bank said Thursday in a statement announcing the proposed deal.

The two businesses would form one of the largest private sector asset managers and one of the largest private-client investment counselling businesses in Canada, with particular strength in the West, it said.

The combination would also make RBC one of the top asset managers for Canadian pension plans and increase its strength in the retail mutual fund market, it said.

The statement quoted Montalbano as saying: "RBC has the commitment and resources to leverage our strengths with institutional, private client and mutual fund clients. In all, it's a great result for our clients, for the two companies and for our people, who have made PH&N the success it is today."